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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2024 <br /> <br /> <br /> <br /> <br />The $265,985 reported as deferred outflows of resources related to pensions resulting from City <br />contributions subsequent to the measurement date will be recognized as a reduction of the net pension <br />liability in the year ended December 31, 2025. Other amounts reported as deferred outflows and <br />inflows of resources related to pensions will be recognized in pension expense as follows: <br /> <br />Year Ended Pension <br />December 31, Expense <br />2025 ($194,749) <br />2026 719,420 <br />2027 (453,786) <br />2028 (1,172,082) <br />2029 36,552 <br />Thereafter - <br /> <br />The net pension liability will be liquidated by the general, water, sewer, and storm water funds. <br /> <br /> <br />E. ACTUARIAL ASSUMPTIONS <br /> <br />The total pension liability in the June 30, 2024 actuarial valuation was determined using the entry-age <br />normal actuarial cost method and the following actuarial assumptions: <br /> <br />Inflation 2.25% per year <br />Investment Rate of Return 7.00% <br /> <br />The long-term investment rate of return is based on a review of inflation and investment return assumptions <br />from a number of national investment consulting firms. The review provided a range of investment return <br />rates considered reasonable by the actuary. An investment return of 7.00% is within that range. <br /> <br />Benefit increases after retirement are assumed to be 1.25% for the General Plan and 1.00% for the Police <br />and Fire Plan. <br /> <br />Salary growth assumptions in the General Plan range in annual increments from 10.25% after one year of <br />service to 3.0% after 27 years of service. In the Police and Fire Plan, salary growth assumptions range in <br />annual increments from 11.75% after one year of service to 3.0% after 24 years of service. <br /> <br />Mortality rates for the General Plan were based on the Pub-2010 General Employee Mortality Table. <br />Mortality rates for the Police and Fire Plan were based on the Pub-2010 Public Safety Employee Mortality <br />tables. The tables are adjusted slightly to fit PERA’s experience. <br /> <br />Actuarial assumptions for the General Plan are reviewed every four years. The General Plan was last <br />reviewed in 2022. The assumption changes were adopted by the board and became effective with the July <br />1, 2023 actuarial valuation. The Police and Fire Plan was reviewed in 2024. PERA anticipates the <br />experience study will be approved by the Legislative Commission on Pensions and Retirement and become <br />effective with the July 1, 2025 actuarial valuation. <br /> <br />70 <br />Page 106 of 353